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The Nature and Types of Advertising • Advertising – Paid form of nonpersonal communication about an organization and its products transmitted to a target audience through mass media, such as television, radio, the Internet, newspapers, magazines, direct mail, outdoor displays, and signs on mass transit vehicles – Promotes goods, services, ideas, images, issues, people, and anything else that advertisers want to publicize or foster Copyright © Houghton Mifflin Company. All rights reserved. 17–1 The Nature and Types of Advertising (cont’d) Type Purpose Institutional Promotes organizational images, ideas, and political issues Advocacy Promotes a company’s position on a public issue Product Promotes products’ uses, features, and benefits Pioneer Tries to stimulate demand for a product category rather than a specific brand by informing potential buyers about the product Competitive Points out a brand’s special features, uses, and advantages relative to competing brands Comparative Compares two or more brands on the basis of one or more product characteristics Reminder Reminds consumers about an established brand’s uses, characteristics, and benefits Reinforcement Assures users they chose the right brand and tells them how to get the most satisfaction from it Copyright © Houghton Mifflin Company. All rights reserved. 17–2 Developing an Advertising Campaign • Advertising Campaign –The design of a series of advertisements and their placement in various advertising media in order to communicate with a particular target audience Copyright © Houghton Mifflin Company. All rights reserved. 17–3 Developing an Advertising Campaign Courtesy of Tropicana Products Inc. Copyright © Houghton Mifflin Company. All rights reserved. 17–4 General Steps in Developing and Implementing an Advertising Campaign FIGURE 17.1 Copyright © Houghton Mifflin Company. All rights reserved. 17–5 Identifying and Analyzing the Target Audience • Target audience is the group of people at whom advertisements are aimed –Location and geographic distribution –Distribution of demographic factors –Lifestyle information –Consumer attitudes Copyright © Houghton Mifflin Company. All rights reserved. 17–6 Geographic Divisions for Time Regional Issues Source: Time Magazine. Copyright © Houghton Mifflin Company. All rights reserved. 17–7 Defining the Advertising Objectives • What does the firm hope to accomplish with the campaign? –Objectives should be clear, precise, and measurable. –Increased sales (units or dollars) and/or increased product or brand awareness Copyright © Houghton Mifflin Company. All rights reserved. 17–8 Creating the Advertising Platform • Basic issues or selling points to be included in the advertising campaign –Issues in the selection and use of the product that are important to customers Copyright © Houghton Mifflin Company. All rights reserved. 17–9 Determining the Advertising Appropriation • Advertising budget for a specified period –Geographic size of the market and distribution of buyers within the market are important factors in determining the size of the budget Copyright © Houghton Mifflin Company. All rights reserved. 17–10 Determining the Advertising Appropriation (cont’d) Budgeting Approach Methodology Objective-and-Task Determining advertising objectives and then calculating the cost of all the tasks needed to attain them Percent-of-Sales Multiplying the firm’s past and expected sales by a standard percentage based on what the firm has traditionally spent on advertising and the industry average for advertising spending Competition-Matching Setting the advertising budget to match competitors’ spending on advertising Arbitrary Setting the advertising budget at a level specified by a high-level executive in the firm Copyright © Houghton Mifflin Company. All rights reserved. 17–11 Table 17.1 Source: Advertising Age, June 28, 2004, pp. S4-S10. Copyright © Houghton Mifflin Company. All rights reserved. 17–12 Developing the Media Plan • Specifies media vehicles (e.g., magazines, radio, and television stations, and newspapers) and the schedule for running the advertisements • Plan objectives focus on achieving the reach and frequency that the budget will allow. – Reach: the percentage of consumers in a target market exposed to an advertisement in a specified period – Frequency: the number of times targeted consumers are exposed to an advertisement in a specified period Copyright © Houghton Mifflin Company. All rights reserved. 17–13 Table 17.2 Source: Robert J. Coen, “U.S. Advertising Volume, 2000-2004,” Universal McCann, www.universalmccann.com/coen_report.html (accessed January 17, 2005). Copyright © Houghton Mifflin Company. All rights reserved. 17–14 Super Bowl Ad Prices Escalate Bowl Year $/ 30second ad I V X XV XX XXV XXX XXXV XXXIX 1967 1971 1976 1981 1986 1991 1996 2001 2005 216,665 306,311 378,515 614,707 864,644 1,012,141 1,207,967 1,986,550 2,400,000 Viewers (millions) (*projected) NA 45.96 57.71 68.29 92.57 79.51 94.08 84.355 90.000* Source: “Super Bowl Statistics,” Advertising Age, www.adage.com/page.cms?pageId=684; CBS News, Feb. 7, 2005, www.cbsnews.com/stories2005/02/07/earlyshow/main672016.shtml. Copyright © Houghton Mifflin Company. All rights reserved. 17–15 What Are the Advantages of Using Newspapers? Reprinted with permission of Newspaper National Network. Copyright © Houghton Mifflin Company. All rights reserved. 17–16 Advertising Copy • Copy: the verbal portion of advertisements – Includes headlines, subheadlines, body copy, and signature • Copy guidelines: – Identify a specific desire or problem – Recommend the product as the best way to satisfy the desire or solve the problem – State product benefits – Substantiate advertising claims – Ask the buyer to take action Copyright © Houghton Mifflin Company. All rights reserved. 17–17 Developing a Storyboard • Storyboard –A mockup combining copy and visual material to show the sequence of major scenes in a commercial Plugged “Hum” Unplugged “Buzz” Copyright © Houghton Mifflin Company. All rights reserved. Leap “Yeah” Upset “Oops” 17–18 Artwork, Illustrations, and Layout • Artwork –An ad’s illustration and layout • Illustrations –Photos, drawings, graphs, charts, and tables used to spark audience interest • Layout –The physical arrangement of an ad’s illustration and copy Copyright © Houghton Mifflin Company. All rights reserved. 17–19 Executing the Campaign • Planning and Coordination • Implementation –Detailed scheduling of campaign phases –Evaluation and corrective action as necessary to make the campaign more effective Copyright © Houghton Mifflin Company. All rights reserved. 17–20 Evaluating Advertising Effectiveness Evaluation Assessment Pretest Evaluation of ads performed before a campaign begins Consumer Jury A panel of a product’s actual or potential buyers who pretest ads Posttest Evaluation of advertising effectiveness after the campaign Recognition Test A posttest in which individuals are shown the actual ad and asked if they recognize it Unaided Recall Test A posttest in which respondents identify ads they have recently seen but are given no recall clues Aided Recall Test A posttest that asks respondents to identify recent ads and provides clues to jog their memories Copyright © Houghton Mifflin Company. All rights reserved. 17–21 Who Develops the Advertising Campaign? Individuals Firm’s Advertising Department Advertising Campaign Advertising Agency Copyright © Houghton Mifflin Company. All rights reserved. 17–22 Who Develops the Advertising Campaign? (cont’d) • Individuals • Persons Within the Firm –Advertising departments in larger firms • Copywriters, artists, media buyers, and technical production coordinators • Advertising Agency –Copywriting, artwork, technical production, and formulation of the media plan • Media experts, researchers, and legal advisers Copyright © Houghton Mifflin Company. All rights reserved. 17–23 Public Relations • Public Relations – Communications efforts used to create and maintain favorable relations between an organization and its stakeholders – Focuses on enhancing the image of the total organization • Public Relations Tools – Written materials • • • • Brochures • Annual reports Newsletters • Corporate identity Company magazines materials News releases • Speeches • Sponsored events Copyright © Houghton Mifflin Company. All rights reserved. 17–24 Major Types of Publicity-Based Public Relations Methods Copyright © Houghton Mifflin Company. All rights reserved. 17–25 Public Relations (cont’d) • Publicity: a news story type of communication transmitted through a mass medium at no charge – News release • A short piece of copy publicizing an event or a product – Feature article • A manuscript of up to 3,000 words prepared for a specific publication – Captioned photograph • A photo with a brief description of its contents – Press conference • A meeting used to announce major news events Copyright © Houghton Mifflin Company. All rights reserved. 17–26 Public Relations (cont’d) • Publicity (cont’d) –Advantages • Credibility • News value • Significant word-of-mouth communications • A perception of being endorsed by the media –Limitations • Must be accepted by news media • Must be timely, interesting, accurate, and in the public interest • Inability to control content or time of release to public Copyright © Houghton Mifflin Company. All rights reserved. 17–27 Public Relations (cont’d) • Dealing with Unfavorable Public Relations –Prevention of negative incidents and events • Safety programs, inspections, and effective quality control procedures –Preparedness for negative incidents and events • Predetermined policies and procedures that expedite news coverage • Being forthright with the press and the public Copyright © Houghton Mifflin Company. All rights reserved. 17–28